I once walked into a classroom in college and was startled by something written on the board. Someone from the last class had written the following elegant proof (apologies to the Shariah compliant, I'm trying to be true to the facts):
Nothing is better than happiness
A ham sandwich is better than nothing
A ham sandwich is better than happiness
QED
I’d like to offer my own proof for in honor of the ESCA decision on the IPIC de-listing.
Nothing is better than the rule of law
Half a Dirham is better than nothing
Half a Dirham is better than the rule of law.
QED.
What I mean by this is that while 1.95AED is certainly a better price than 1.45AED the shareholders have no say in the decision either way. Whether IPIC or ESCA decide the price it is still a take it or leave it deal for the shareholders and they have no choice but to accept what is, in the end, an arbitrary decision which differs only who is making it and at what level. The wishes of the minority shareholders themselves are never taken into consideration. You have to remember the context, 1.45 AED is 50% of book, 1.95 AED is still only 67% of book. Usually holding companies like Aabar trade at about 1 times book in other markets. KKR for example is trading just under 1 times book as of Friday. Even though the shareholders are getting a better deal than the one IPIC offered them, it’s still not a great deal.
No comments:
Post a Comment